Rupee Rises 6 Paise to 88.67 Against U.S. Dollar as Greenback Weakens Amid Economic Concerns

Rupee Gains Slightly in Early Trade

The Indian rupee traded in a narrow range and appreciated by 6 paise to 88.67 against the U.S. dollar in early trading on Tuesday, buoyed by weakness in the greenback and easing concerns over the U.S. economy’s long-term outlook.

At the interbank foreign exchange market, the rupee opened at 88.79 and strengthened to 88.67, compared to its previous close of 88.73. Around mid-session, it was trading marginally lower at 88.71 against the dollar.

Forex traders noted that while global cues remained positive, foreign fund outflows and a muted trend in domestic equities limited the local currency’s advance.

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Global Sentiment Supports Rupee

Market sentiment improved following progress on the U.S. government shutdown bill and renewed optimism over a potential U.S.-India trade deal.

U.S. President Donald Trump expressed support for the bipartisan deal to reopen the government, suggesting that an end to the record-long shutdown was imminent. He also indicated that Washington and New Delhi were “pretty close” to finalizing a “fair trade deal” and hinted at a possible reduction in tariffs on Indian goods.

“We’re making a deal with India — a much different deal than we had in the past. So right now, they don’t love me, but they’ll love us again,” Trump said on Monday.

According to a research note from IFA Global, the prospect of lower U.S. tariffs and stronger bilateral trade ties helped lift investor sentiment toward emerging market currencies, including the rupee.

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Dollar, Oil, and Equity Movements

The dollar index, which tracks the greenback against a basket of six major currencies, was up 0.06% at 99.65, indicating mild strength after recent declines driven by weak U.S. economic data.

In the commodities market, Brent crude futures slipped 0.14% to $63.97 per barrel, providing relief to India — the world’s third-largest oil importer — and supporting the rupee’s stability.

However, Indian equity markets remained under pressure. The BSE Sensex fell 175.32 points to 83,360.03, while the NSE Nifty dropped 51.60 points to 25,522.75 in early trading.

Foreign Institutional Investors (FIIs) continued to offload holdings, selling equities worth ₹4,114.85 crore on Monday, according to stock exchange data.

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Outlook

Analysts expect the rupee to remain range-bound in the near term, with global risk sentiment, crude oil prices, and FII activity influencing its trajectory.

“While global factors like easing U.S. fiscal tensions and trade optimism are positive, persistent equity outflows could cap major gains for the rupee,” a Mumbai-based forex trader said.

Market participants are now watching U.S. inflation data and further updates on trade negotiations for cues that could guide currency movements later this week.